Why Does Venu Sports Want to Self-Destruct in 9 Years?

Per a recent court filing, Venu Sports, the coming sports-centric streaming service from Fox, Disney, and Warner Bros. Discovery, is set to self-destruct in nine years. No one asked the joint-venture partners to set an expiration date on a service they have not yet even launched, and doing so is definitely not normal business practice, so why forfeit to the competition before you even enter the game?

There appears to be two things going on here. One is that Venu is currently trying to survive a call for an injunction by that other sports-centric streaming service, Fubo. The strategy: The Venu joint venture is not meant to bully Fubo into oblivion or to cannibalize cable customers, therefore there’s no antitrust violation. A Disney court filing from July 25, 2024, obtained by IndieWire, reads (in part, and emphasis ours):

Venu is structured to maintain and protect competition among its members. Each JV member will continue to negotiate individually with leagues to acquire sports rights; Venu will not acquire sports rights itself. Each member will continue individually to negotiate carriage agreements for its networks with Venu and other distributors; Venu will have no exclusive content, no say in how its members license their content to others, and no right to license its content to other MVPDs. A firewall prevents sharing of competitively sensitive information. Venu is finite, with a nine-year term. Fubo points to no case where a joint venture with characteristics like these has been enjoined as violating antitrust laws.

The claim of Venu’s “finite” nature appears to be Disney and Fox padding their stats (to borrow another sports term) as to how Fubo’s antitrust accusation has no direct, exact, and enforced comparison from which the court may draw. The parties are battling it out in a court of law as we write this.

According to an uninvolved attorney — Bryan Sullivan, a partner with Early Sullivan Wright Gizer & McRae — the finite factor is “not sufficient” to prove there isn’t a negative impact on the market and competition. Nothing forces Venu to stick to that nine-year expiration date, even if it’s in their current agreement.

“Arguing that it is finite is evidence that it does not have a catastrophic impact on competition in the market, but the counter argument is that it can be extended or renewed or renegotiated,” Sullivan told IndieWire. “Saying in a pleading that the contract is finite and pointing to that language about being finite in the agreement is true, but does not bind them from never amending, modifying, extending, or superseding that agreement with a new agreement.”

A Fubo spokesperson declined IndieWire’s request for comment on this story.

The other reason for the Venu companies to promise self-immolation in nine years? To us, it’s sure suspicious that 2033 brings both the dissolution of Venu Sports and the expiration of the current NFL media-rights deal. Worth a combined $110 billion, the agreement from 2021 spreads games across Amazon Prime Video, CBS (and Paramount+), ESPN (and ESPN+, and ABC), Fox, NBC (and Peacock), the NFL Network, Netflix, and YouTube.

If you think those NFL TV and streaming rights are expensive now — and they certainly are — just wait until 2033. Venu Sports did not exist even as a concept during the prior negotiations. If it had, the NFL probably would have demanded even more money from Disney and Fox (WBD has no NFL games). Next time, the league won’t be caught by surprise.

A spokesperson for the NFL did not immediately respond to our request for comment on this story (and our theory). A spokesperson for Venu Sports pushed us toward the partner companies: Fox did not provide a comment, and spokespeople for Disney/ESPN and WBD Sports did not immediately respond to our emails.

While the NFL runs the show, it is not the only game in town — but it is the headliner. The current NCAA media-rights deal expires in 2032, Major League Baseball’s ends in 2028 and 2029, depending on the platform, and the NHL deal expires a year or two before that.

Without a definitive end date for Venu, pre-2033 negotiations with the NFL could be awkward. A hypothetical: If Fox or Disney lost their NFL rights, would a continuation of Venu even be possible? Would two of the three companies kick the third one out? Does Fox and Disney want to do that now to an NBA-less WBD?

Or, what if one of the JVs got disproportionately more NFL games? Would that party want to pull out of the group to unlock more value in its own streaming service?

Speaking of, Fox, you might want to get one of those.

Venu Sports is set to launch in the fall at a price of $42.99 per month.

Additional reporting by Brian Welk